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December 19, 1975 - Image 21

Resource type:
The Detroit Jewish News, 1975-12-19

Disclaimer: Computer generated plain text may have errors. Read more about this.


Israel's Austerity Budget Bitterly Debated

The Cabinet began what is
expected to be a prolonged
and bitter debate over the
$12 billion austerity budget
submitted by Finance Min-
ister Yehoshua Rabinowitz
for the next fiscal year.
The draft budget,
strongly backed by Premier
Yitzhak Rabin and the Bank
of Israel which helped to
shape it, represents the be-
ginning of a three-four-year
effort to put Israel's sev-
erely strained economy in
order by drastic cuts in gov-
ment expenditures and
__,pefully, substantial in-
creases in income from
taxes and invigorated export
Already dubbed the New
Economic Program (NEP),
the budget would demand
major sacrifices from the
public in the form of higher
prices, new taxes, reduced
services, lower living stand-
ards and, most painful of
all, a sharp increase in un-

The proposed budget,
challenged at the outset by
various Cabinet members
whose ministries would be
affected by the reduced
spending, was bitterly at-
tacked by Histadrut which
charged that the heaviest
burden would fall on wage

The new budget exceeds
the current one by IL 21 bil-
lion,. (about $3 billion), but
in real terms is actually five
percent lower because of
inflation. It reflects Israel's
immense defense burdens.
Of the proposed IL 84.2 bil-
lion, IL 25.25 billion is ear-
marked for defense. The
education ministry would
get IL 3.16 billion and the
health ministry IL 1 billion.
The budgets of all other

`Arafat Changed
Position on Israel'

The London Times reports
that Yasir Arafat, the
leader of the Palestine Lib-
eration Organization, as a
result of his visit to Moscow,
has changed his position on
Israel. The paper declares
that Soviet leaders con-
vinced Arafat to agree on
these principles: -
To accept the Soviet for-
mula on the rights of all
countries in the Middle East
to live in peace — on the
condition that Israel with-
draw from the occupied
areas, to agree on the re-
newal of the Geneva Confer-
ence with no pre-conditions
and to establish a Palestine
he Times correspondent
claims that Arafat accepted
the first two conditions but
rejected the third.

ministries wovild fall below
the IL 1 billion mark.
The treasury hopes to
cushion the impact of unem-
ployment by transferring
about 100,000 workers from
public service to productive
industries over the next four
years and by introducing
new incentives for foreign
investors who, presumably,
would create new jobs.
It hopes to add to the gov-
ernment's income by impos-
ing the long projected five
percent added value tax,
tightening up on tax collec-
tion procedures and audit-
ing "cash transactions," a
common form of tax eva-
sion. Export intensive in-.
dustries would be granted
tax exemptions and would
be protected from the peri-
odic devaluation of the
pound. The same induce-
ments would apply to for-
eign investors.


Meanwhile, Premier

(Continued from Page 20)


Yitzhak Rabin called on
the Labor Party to demon-
strate political courage by
sponsoring severe cuts in
government services be-
cause of Israel's serious
economic situation.

He said Israel could not
rely on economic assistance
from the United States to
continue on its present
scale and that the aid ob-
tainable from world Jewry
will not' increase signifi-

UN Endorses Women's
Zionism Condemnation

with Echeverria last Friday
expressed surprise at Mexi--
co's vote Monday and said
they Would continue to ad-
vocate a boycott of travel to
The government would
The delegation included:
drastically reduce its sub- Seymour Graubard of the
sidies for basic food Anti-Defamation League of
products and public trans- Bnai Brith, Bertram Gold
portation which have kept and Richard Maass 'of the
prices in those areas more American Jewish Commit-
tee, Philip Baum and Will
or less stable up to now.
In addition, road con- Maslow of the American
struction would come to a Jewish Congress, Burton
virtual halt as would the Levinson and Rabbi Morton
construction of public build- S. Rosenthal of the ADL
ings. Although the govern-
men promises no more ma-
jor devaluations of the
pound, the so-called
"Creeping devaluation" — a
1-2 percent depreciation ev-
ery 30 days — would con-
tinue. The pound, which
now stands at 7.1 to $1,
would decline to IL 10 to $1
by the end of 1976.
Even the reduced budget
would leave Israel with an
IL 3.5 billion deficit next
year, but that would be an
improvement over this
year's IL 5 billion deficit.
While every Cabinet minis-
ter is expected to put up a
last ditch fight for his
budget needs, the Cabinet
as a whole realizes that
without compromises the
. national budget would ex-
ceed IL 100 billion which the.
government simply cannot.
afford. Nevertheless, hard
bargaining is expected dur-
ing the months ahead.
Meanwhile, the Central
Bureau of Statistics re-
ported that the consumer
price index rose by 3.2 per-
cent in November. Prices
are expected to increase by
another 2-3 percent this
month producing a cumula-
tive 25 percent increase in
Philly's been whipped.
prices for 1975.




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Latin . American Affairs

Also, Lawrence Peirez_of
Bnai Brith, Mrs. Rose Matz-
kin of Hadassah, Dr. Max
Matzkin of Hadassah Asso-
ciates, Mrs. Thelma Morse
of the National Council of
Jew'ish Women; Jacques
Torczyner of the American
Section of the World Jewish
Congress; Max Shechter of
Bnai Brith; Samuel Broch-
stein of the Synagogue
Council of America and Dr.
Seymour Weisman of the
Jewish War Veterans.


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At the same time, the
Israel Income Tax Corn-
mission has summoned
2,200 persons in higher
income brackets for ques-
tioning to determine
whether they have been
paying the proper amount
of taxes.

The treasury announced
Sunday that tax collection
procedures would be tight-
TEL AVIV (ZINS) — The ened to make sure the gov-
following humorous item is ernment gets the income it
widely circulated in the is entitled to by law.
The persons whose tax
country: The Labor Party's
candidate for the post of returns will be scrutinized
chairman of the World Zion- were selected on the basis of
ist Organization, Joseph their living standards. They
Almogi, decided to grow a include owners of large au-
beard — for the sole pur- tomobiles, pleasure boats
pose of resembling Dr. and luxury homes valued in
excess of $100,000, and per-
Theodor Herzl.

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sons who make frequent
trips abroad and are gener-
ally "known for their high_,
standard of living," treasury
officials said.
The Tax Commission be-
lieves there are tens of thou-
sands of persons who fit
that category which is at
sharp variance with the
image of Israelis as a people
heavily burdened by taxes
and struggling to make ends

December19, 1975 21


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